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Extra Crunch roundup: Selling SaaS to developers, cracking YC after 13 tries, all about Expensify
Before Twilio had a market cap approaching $56 billion and more than 200,000 customers, the cloud-communications platform developed a secret sauce to fuel its growth: a developer-focused model that dispensed with traditional marketing rules.
Software companies that sell directly to end users share a simple framework for managing growth that leverages discoverability, desirability and do-ability — the “aha!” moment where a consumer is able to incorporate a new product into their workflow.
Data show that traditional marketing doesn’t work on developers, and it’s not because they’re impervious to a sales pitch. Builders just want reliable tools that are easy to use.
As a result, companies that are looking to create and sell software to developers at scale must toss their B2B playbooks and meet their customers where they are.
Attorney Sophie Alcorn, our in-house immigration law expert, submitted two columns: On Monday, she analyzed a decision by the U.S. Department of Homeland Security not to cancel the International Entrepreneur Parole program, which potentially allows founders from other countries to stay in the U.S. for as long as 60 months.
On Wednesday, she responded to a question from an entrepreneur who asked whether it made sense to sponsor visas for workers who are working remotely inside the U.S.
Thanks very much for reading Extra Crunch this week, and have a great weekend.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
4 lessons I learned about getting into Y Combinator (after 13 applications)
Image Credits: Peter Finch (opens in a new window) / Getty Images
Can you imagine making 13 attempts at something before attaining a successful outcome?
Alex Circei, CEO and co-founder of Git analytics tool Waydev, applied 13 times to Y Combinator before his team was accepted. Each year, the accelerator admits only about 5% of the startups that seek to join.
“Competition may be fierce, but it’s not impossible,” says Circei. “Jumping through some hoops is not only worth the potential payoff but is ultimately a valuable learning curve for any startup.”
In an exclusive exposé for TechCrunch, he shares four key lessons he learned while steering his startup through YC’s stringent selection process.
The first? “Put your business value before your personal vanity.”
The Expensify EC-1
Image Credits: Illustration by Nigel Sussman, art design by Bryce Durbin
In March, TechCrunch Daily Reporter Anna Heim was interviewing executives at Expensify to learn more about the company’s history and operations when they unexpectedly made themselves less available.
Our suspicions about their change of heart were confirmed on May 3 when the expense report management company confidentially filed to go public.
With a founding team comprised mainly of P2P hackers, it’s perhaps inevitable that Expensify doesn’t look and feel like something an MBA might envision.
“We hire in a super different way. We have a very unusual internal management structure,” said founder and CEO David Barrett. “Our business model itself is very unusual. We don’t have any salespeople, for example.”
Similar to the way companies must file a Form S-1 that describes their operations and how they plan to spend capital, TechCrunch EC-1s are part origin story, part X-ray. We published the first article in a series on Expensify on Monday:
- “How a band of P2P hackers planted the seeds of a unique expense management giant” (2,400 words/10 minutes) — Explores the founders’ days with a P2P content distribution startup called Red Swoosh (Travis Kalanick’s venture before Uber) and how that experience influenced Expensify’s development.
We’ll publish the remainder of Anna’s series on Expensify in the coming weeks, so stay tuned.
As Procore looks to nearly double its private valuation, the IPO market shows signs of life
Image Credits: Nigel Sussman (opens in a new window)
Construction tech unicorn Procore Technologies this week set a price range for its impending public offering. The news comes after the company initially filed to go public in February of 2020, a move delayed by the pandemic.
In March 2021, Procore filed again for a public offering, but its second shot ran into a cooling IPO market. The company filed another S-1/A in April, and then another in early May. This week’s filing is the first that sets a price for the Carpinteria, California-based software upstart.
But Procore is not the only company that filed and later put on hold an IPO to get back to work on floating. Kaltura, a software company focused on video distribution, also recently got its IPO back on track. Are we seeing a reacceleration of the IPO market? Perhaps.
3 golden rules for health tech entrepreneurs
Image Credits: Patcharin Saenlakon/EyeEm (opens in a new window) / Getty Images
Family physician Bobbie Kumar lays out the golden rules to ensure your healthcare product, service or innovation is on the right track.
Rule 1: “It’s not enough to develop a ‘new tool’ to use in a health setting,” Dr. Kumar writes. “Maybe it has a purpose, but does it meaningfully address a need, or solve a problem, in a way that measurably improves outcomes? In other words: Does it have value?”
Dear Sophie: How does the International Entrepreneur Parole program work?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie,
I’m the founder of an early-stage, two-year-old fintech startup. We really want to move to San Francisco to be near our lead investor.
I heard International Entrepreneur Parole is back. What is it, and how can I apply?
— Joyous in Johannesburg
Digging into digital mortgage lender Better.com’s huge SPAC
Image Credits: Nigel Sussman (opens in a new window)
If you have heard of Better.com but really had no idea what it does before this moment, welcome to the club. Mortgage tech is like pre-kindergarten applications — it applies to a very specific set of folks at a very particular moment. And they care a lot about it. But the rest of us aren’t really aware of its existence.
Better.com, a venture-backed digital mortgage lender, announced this week that it will combine with a SPAC, taking itself public in the second half of 2021. The unicorn’s news comes as the American IPO market is showing signs of fresh life after a modest April.
As tech offices begin to reopen, the workplace could look very different
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The pandemic forced many employees to begin working from home, and, in doing so, may have changed the way we think about work. While some businesses have slowly returned to the office, depending on where you live and what you do, many information workers remain at home.
That could change in the coming months as more people get vaccinated and the infection rate begins to drop in the U.S.
Many companies have discovered that their employees work just fine at home. And some workers don’t want to waste time stuck on congested highways or public transportation now that they’ve learned to work remotely. But other employees suffered in small spaces or with constant interruptions from family. Those folks may long to go back to the office.
On balance, it seems clear that whatever happens, for many companies, we probably aren’t going back whole-cloth to the prior model of commuting into the office five days a week.
For unicorns, how much does the route to going public really matter?
Image Credits: PM Images (opens in a new window) / Getty Images
On a recent episode of TechCrunch’s Equity podcast, hosts Natasha Mascarenhas and Alex Wilhelm invited Yext CFO Steve Cakebread and Latch CFO Garth Mitchell on to discuss when companies should go public, the costs and benefits of the process and when a SPAC can make sense. Yext pursued a traditional IPO a few years back; Latch is now going public via a blank-check company combination.
The chat was more than illustrative, as we got to hear two CFOs share their views on delayed public offerings and when different types of debuts can make the most sense. While the TechCrunch crew has, at times, made light of certain SPAC-led deals, the pair argued that the transactions can make good sense.
Undergirding the conversation was Cakebread’s recent IPO-focused book, which not only posited that companies going public earlier rather than later is good for their internal operations but also because it can provide the public with a chance to participate in a company’s success.
In today’s hypercharged private markets and frothy public domain, his argument is worth considering.
The truth about SDK integrations and their impact on developers
Image Credits: John Lund (opens in a new window) / Getty Images
Ken Harlan, the founder and CEO of Mobile Fuse, writes about the perks and pitfalls of software development kits.
“The digital media industry often talks about how much influence, dominance and power entities like Google and Facebook have,” Harlan writes. “Generally, the focus is on the vast troves of data and audience reach these companies tout. However, there’s more beneath the surface that strengthens the grip these companies have on both app developers and publishers alike.
“In reality, SDK integrations are a critical component of why these monolith companies have such a prominent presence.”
Don’t hate on low-code and no-code
Image Credits: Nigel Sussman (opens in a new window)
The Exchange caught up with Appian CEO Matt Calkins after his enterprise app software company reported its first-quarter performance to discuss the low-code market and what he’s hearing in customer meetings. To round out our general thesis — and shore up our somewhat bratty headline — we’ve compiled a list of recent low-code and no-code venture capital rounds, of which there are many.
As we’ll show, the pace at which venture capitalists are putting funds into companies that fall into our two categories is pretty damn rapid, which implies that they are doing well as a cohort. We can infer as much because it has become clear in recent quarters that while today’s private capital market is stupendous for some startups, it’s harder than you’d think for others.
Bird’s SPAC filing shows scooter-nomics just don’t fly
A pair of Bird e-scooters parked in Barcelona. Image Credits: Natasha Lomas/TechCrunch
Historically — and based on what we’re seeing in this fantastical filing — Bird proved to be a simply awful business. Its results from 2019 and 2020 describe a company with a huge cost structure and unprofitable revenue, per filings. After posting negative gross profit in both of the most recent full-year periods, Bird’s initial model appears to have been defeated by the market.
What drove the company’s hugely unprofitable revenues and resulting net losses? Unit economics that were nearly comically destructive.
Dear Sophie: Does it make sense to sponsor immigrant talent to work remotely?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie,
My startup is in big-time hiring mode. All of our employees are currently working remotely and will likely continue to do so for the foreseeable future — even after the pandemic ends. We are considering individuals who are living outside of the U.S. for a few of the positions we are looking to fill.
Does it make sense to sponsor them for a visa to work remotely from somewhere in the United States?
— Selective in Silicon Valley
The hamburger model is a winning go-to-market strategy
Image Credits: ivan101 / Getty Images
“Today, we live in a world of product-led growth, where engineers (and the software they have built) are the biggest differentiator,” says Coatue Management general partner Caryn Marooney and investor David Cahn. “If your customers love what you’re building, you’re headed in the right direction. If they don’t, you’re not.
“However, even the most successful product-led growth companies will reach a tipping point, because no matter how good their product is, they’ll need to figure out how to expand their customer base and grow from a startup into a $1 billion+ revenue enterprise.
“The answer is the hamburger model. Why call it that? Because the best go-to-market (GTM) strategies for startups are like hamburgers:
- The bottom bun: Bottom-up GTM.
- The burger: Your product.
- The top bun: Enterprise sales.”
Software subscriptions are eating the world: Solving billing and cash flow woes simultaneously
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Krish Subramanian, the co-founder and CEO of Chargebee, writes that while subscription business models are attractive, there are two major pitfalls: First, payment.
“Regardless of company size, there’s an ongoing need to convince customers to sign up long term,” Subramanian writes. “The second issue: How do businesses cover the funding gap between when customers sign up and when they pay?”
Is there a creed in venture capital?
Image Credits: Aimee Blasee (opens in a new window)
Scott Lenet, the president of Touchdown Ventures, asks how deal-makers should think about how to handle themselves when counter-parties attempt to change an agreement. “When is it OK to modify terms, and when should deal-makers stand firm?” he asks.
“Entrepreneurs and investors should recognize that contracts are worth very little without the ongoing relationship management that keeps all parties aligned. Enforcement is so unusual in the world of startups that I consider it a mostly dead-end path. In my experience, good communication is the only reliable remedy. This is the way.”
Even startups on tight budgets can maximize their marketing impact
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“Search engine optimization, PR, paid marketing, emails, social — marketing and communications is crowded with techniques, channels, solutions and acronyms,” writes Dominik Angerer, CEO and co-founder of Storyblok, which provides best practice guidance for startups on how to build a sustainable approach to marketing their content. “It’s little wonder that many startups strapped for time and money find defining and executing a sustainable marketing campaign a daunting prospect.
“The sheer number of options makes it difficult to determine an effective approach, and my view is that this complexity often obscures the obvious answer: A startup’s best marketing asset is its story.”
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Extra Crunch roundup: Klaviyo EC-1, micromobility’s second wave, UiPath CFO interview, more
Origin stories are satisfying because we already know the hero will overcome the odds — and in doing so, they’ll reveal their core strengths.
This week, we published a four-part series about how Klaviyo co-founders Andrew Bialecki and Ed Hallen bootstrapped their startup into an e-commerce marketing automation platform now valued at $4.15 billion.
Neither founder was bitten by a radioactive spider or received a serum that enhanced their entrepreneurial skills; instead, they focused on outreach to prospective customers to find out what they were willing to pay for and largely ignored the competition.
“Bootstrapping Klaviyo, it came out of this: ‘Hey, if we are super disciplined about finding a problem that someone will pay us to solve, we have a real company,’” said Hallen.
Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.
Even though millions of us respond every day to the personalized, automated emails sent through its platform, Klaviyo still isn’t a well-known brand. Our ongoing series of EC-1s offers entrepreneurs real insight into growing and scaling successful companies, but they’re also extremely useful for consumers who want to understand how the internet really works.
Thanks very much for reading Extra Crunch; I hope you have a great weekend.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
The Klaviyo EC-1
Image Credits: Nigel Sussman
- Part 1: How Klaviyo transformed from a lifestyle business into a $4.15B email titan
- Part 2: How Klaviyo used data and no-code to transform owned marketing
- Part 3: Marketing in 2021 is emotional and not just transactional
- Part 4: Drama and quirk aren’t necessary for startup success
Micromobility’s next big business is software, not vehicles
Image Credits: slowcentury (opens in a new window) / Getty Images
Several micromobility companies once operated in my city, but consolidation has reduced that to a small handful.
Now that many consumers are buying their own e-bikes and e-scooters, shared dockless micromobility “just hasn’t proven itself to be a profitable line of business,” Puneeth Meruva, an associate at Trucks Venture Capital, told TechCrunch.
There’s only one dockless electric moped provider in my town, so price is no longer a consideration. Instead, my first priority is to find a vehicle with the best-charged battery. (San Francisco has a lot of hills, and you never know where the day might take you.)
Larger players like Lime and Bird have vertically integrated tech stacks for fleet management features like this, but there are also opportunities for startups — imagine a “phantom scooter” that drives itself to a neighborhood with high demand or a moped that alerts drivers if there’s traffic ahead.
This in-depth industry analysis shows how increased regulation on the local level and changing consumer habits are pushing micromobility providers to adapt and innovate.
“Whether you want to stack regulatory compliance on the vehicles, do safety features like ADAS or add mapping content, you kind of need this platform where you can actively develop and launch new apps on the vehicle without having to bring it back to the factory,” Meruva said.
Enterprise security attackers are one password away from your worst day
Image Credits: TechCrunch/Bryce Durbin
If the definition of insanity is doing the same thing over and over and expecting a different outcome, then one might say the cybersecurity industry is insane.
Criminals continue to innovate with highly sophisticated attack methods, but many security organizations still use the same technological approaches they did 10 years ago. The world has changed, but cybersecurity hasn’t kept pace.
Data scientists: Bring the narrative to the forefront
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By 2025, 463 exabytes of data will be created each day, according to some estimates. It’s now easier than ever to translate physical and digital actions into data, and businesses of all types have raced to amass as much data as possible in order to gain a competitive edge.
However, in our collective infatuation with data (and obtaining more of it), what’s often overlooked is the role that storytelling plays in extracting real value from data.
The reality is that data by itself is insufficient to really influence human behavior. Whether the goal is to improve a business’ bottom line or convince people to stay home amid a pandemic, it’s the narrative that compels action, not the numbers alone.
As more data is collected and analyzed, communication and storytelling will become even more integral in the data science discipline because of their role in separating the signal from the noise.
Business continuity planning is a necessity for your fund and portfolio
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We all need to be taking precautionary measures, not just in light of COVID, but to ensure our firms can continue to thrive when faced with unexpected tragedy.
So ask yourself this question: “What would happen if I or my partner(s) checked into the hospital tomorrow and had no phone and/or was too sick to call anyone, and that went on for two or three weeks (or longer)?”
If the answer is “I’m really not sure,” then you don’t have a business continuity plan.
Outdoor startups see supercharged growth during COVID-19 era
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After years of sustained growth, the pandemic supercharged the outdoor recreation industry. Startups that provide services like camper vans, private campsites and trail-finding apps became relevant to millions of new users when COVID-19 shut down indoor recreation, building on an existing boom in outdoor recreation.
Startups like Outdoorsy, AllTrails, Cabana, Hipcamp, Kibbo and Lowergear Outdoors have seen significant growth, but to keep it going, consumers who discovered a fondness for the great outdoors during the pandemic must turn it into a lifelong interest.
Once VMware is free from Dell, who might fancy buying it?
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Dell last week agreed to spin out VMware in exchange for a huge one-time dividend, a five-year commercial partnership agreement, lots of stock for existing Dell shareholders and Michael Dell retaining his role as chairman of its board.
So, where does the deal leave VMware in terms of independence and in terms of Dell influence?
Time-strapped IT teams can use low-code software to drive quick growth
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Many emerging and mature organizations survive or die based on their ability to scale. Scale quicker. Scale cheaper. Scale right.
Typically the IT team bears that burden — on top of countless other demands. IT teams move mountains for their organizations while scaling the tech platform as fast as possible, putting out the latest infrastructure fire and responding to countless day-to-day requests.
The most helpful gift any chief information officer or chief technology officer can give their IT teams is more time. Many people think that means adding another team member. But it could be as simple as introducing a low-code integration platform.
European VC soars in Q1
Image Credits: Nigel Sussman (opens in a new window)
A stunning first quarter in venture capital funding was not restricted to the United States; Europe also had one hell of a start to the year.
The venture capital world kicked off its 2021 European investing cycle with enough activity to set the continent on the path that would crush yearly records.
Inside the data, there’s lots to unpack, including which sectors of European startups stood out in terms of capital raised, rising seed and late-stage deals, and dollar volume. We’ll also need to discuss exits — the Deliveroo IPO and its various woes was not the only transaction from the period worth understanding.
We’ll keep in mind that all venture capital data lags reality somewhat, as many deals from a particular period are not disclosed or discovered until long after they actually occurred.
In this case, it makes the numbers all the more impressive.
UiPath raises IPO range, still targets lower valuation than final private round
Image Credits: Zastrozhnov (opens in a new window) / Getty Images
Robotic process automation unicorn UiPath went public this week, concentrating our focus on its value.
UiPath raised its last private round when the markets were most interested in public offerings and is now going public in a slightly altered climate.
In numerical terms, UiPath raised its IPO range from $43 to $50 per share to $52 to $54 per share. That’s a 21% jump in the value of the lower end of its range and an 8% gain to the value of the upper end of its per-share IPO price interval.
UiPath is also selling more shares than before, which should make its total valuation slightly larger at the top end than a mere 8% gain. So let’s go through the math one more time.
Insurtech startups are leveraging rapid growth to raise big money
Image Credits: Nigel Sussman (opens in a new window)
The investment landscape for insurtech startups is off to a hot start in Q2 2021. Since the end of the first quarter, we’ve seen several players in the broad startup category announce new capital.
But, as anyone who’s familiar with startups that offer insurance-related products and services knows, the sector is enough of a mixed bag that one needs to segment down to get clarity on how constituent companies are performing.
Let’s discuss insurtech’s 2020 as a whole, peek at some preliminary 2021 venture data and then dive deep into what we’ve collected regarding growth among insurtech marketplace players.
Covering longitudinal progress of specific startup categories is one of our favorite things to do. So, please, walk with us!
Deep Science: Introspective, detail-oriented and disaster-chasing AIs
Image Credits: Kehan Chen / Getty Images
Research papers come out far too frequently for anyone to read them all. That’s especially true in the field of machine learning, which now affects (and produces papers in) practically every industry and company.
This column aims to collect some of the most relevant recent discoveries and papers — particularly in, but not limited to, artificial intelligence — and explain why they matter.
This week, we dove into “introspective failure prediction,” using ML to identify dangerous moles, and spotting cows from space.
Who’s funding privacy tech?
Image Credits: Gearstd (opens in a new window) / Getty Images
With strict privacy laws such as GDPR and CCPA already listing big-ticket penalties — and a growing number of countries following suit — businesses have little option but to comply.
It’s not just bigger, established businesses offering privacy and compliance tech; brand-new startups are filling in the gaps in this emerging and growing space.
Privacy isn’t dead, as many would have you believe. New regulations, stricter cross-border data transfer rules and increasing calls for data sovereignty have helped the privacy startup space grow thanks to an uptick in investor support.
This is how we got here, and where investors are spending.
A cooling trend in public markets makes UiPath’s down-round IPO a win for the company
Image Credits: Nigel Sussman (opens in a new window)
UiPath is not worth $36 billion, as we might have expected, but at a figure below $30 billion.
At $29.1 billion, UiPath has a roughly 35x run-rate multiple. That just about ties it for eighth-best overall. Among all public cloud companies. That means that UiPath is insanely valuable, just not that insanely valuable.
So what went wrong with the company’s final private round? The Exchange’s hunch is that UiPath’s final private investors expected the market to stay as hot as it once was, but it has cooled since the first two months of the year. So, instead of UiPath coming to the market in the expected climate, the company instead had to price where it did because the weather predicted by its final private price had already chilled.
Those investors gambled, in other words, hoping that a last-minute, pre-IPO round could snag them a rapid return on a company going public in a hot market. That didn’t work out.
And how bad is that? Not very! UiPath’s IPO is more a meeting of private-market exuberance and modestly more conservative public markets. It’s nothing to cry about.
4 ways martech will shift in 2021
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The second half of 2021 will bring incredible growth, the likes of which we haven’t seen in a long time.
Here’s how marketing in tech will shift — and what you need to know to reach more customers and accelerate growth this year.
First and foremost, differentiation is going to be imperative. It’s already hard enough to stand out and get noticed, and it’s about to get much more difficult as new companies emerge and investments and budgets balloon in the latter half of the year.
Additionally, tech companies need to be mindful not to ignore the most important part of the ecosystem: people. Technology will only take you so far, and it’s not going to be enough to survive the competition.
Tactically, the most successful tech companies will embrace video and experimentation in their marketing — two components that will catapult them ahead of the competition.
Ignoring these predictions, backed by empirical evidence, will be detrimental and devastating. Fasten your seatbelts: 2021 is going to be a turbocharged year of growth opportunities for marketing in tech.
Dear Sophie: How can I get my startup off the ground and visit the US?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie,
I’m a female entrepreneur who created my first startup a few months ago.
Once my startup gets off the ground — and as COVID-19 gets under control — I’d like to visit the United States to test the market and meet with investors. Which visas would allow me to do that?
—Noteworthy in Nairobi
As UiPath closes above its final private valuation, CFO Ashim Gupta discusses his company’s path to market
Despite a somewhat circuitous route, UiPath closed its first day as a public company worth more than it was in its Series F round — when it sold 12,043,202 shares at $62.27576 apiece, per SEC filings. More simply, UiPath closed on Wednesday worth more per-share than it was in February.
How you might value the company, whether you prefer a simple or fully diluted share count, is somewhat immaterial at this juncture. UiPath had a good day.
TechCrunch spoke with UiPath CFO Ashim Gupta, curious about the company’s choice of a traditional IPO, its general avoidance of adjusted metrics in its SEC filings and the IPO market’s current temperature.
How are VCs handling diligence in a world where deals open and close in days, not months?
Image Credits: Nigel Sussman (opens in a new window)
The global venture capital market had a cracking start to the year. Coming off a 2020 high, VC totals in the United States, in Europe, and among competitive verticals like insurtech and AI are on pace to set new records in 2021.
The rapid-fire deal-making and trend of larger venture checks at higher valuations that The Exchange has tracked for some time require private-market investors to make decisions faster than ever. For venture capitalists, the timeline for reaching conviction around a startup’s thesis and executing due diligence has become compressed.
Some venture capitalists are turning to data to move more quickly. Some are spending more time preparing to be vetted themselves. And some investors are simply doing the work beforehand.
We were tipped off to the concept of pre-diligence during the reporting process for a look into recent fundraising trends in the AI/ML space. Sapphire investor Jai Das, when asked about how he was handling a competitive and swiftly moving market for AI startup investments, said that “most firms are completing their due diligence way before the financing actually happens.”
How does that work in practice?
Customer care as a service: Outsourcing can help your startup wow clients 24/7
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Your clients might not demand 24/7 customer service yet, but they’re certainly hoping for it.
But how can a startup with a lean staff provide round-the-clock customer care? There are several options available, but more than ever, outsourcing is one of them.
When should your startup consider outsourcing its customer care? And what should you look for in a provider?
Here are some insights on what customer care as a service (CCaaS) can do for you, and how fast-growing startups have been leveraging this new class of partners to boost customer satisfaction.
5 emerging use cases for productivity infrastructure in 2021
Image Credits: Erik Isakson / Getty Images
Productivity infrastructure is on the rise and will continue to be front and center as companies evaluate what their future of work entails and how to maintain productivity, rapid software development and innovation with distributed teams.
Understanding the benefits, use cases and steps to consider can propel organizations into the next phase of digital transformation.
To sell or not to sell: Lessons from a bootstrapped CEO
Image Credits: Klaus Vedfelt (opens in a new window) / Getty Images
The clock begins ticking on a startup the day the doors open. Regardless of a young company’s struggles or success, sooner or later the question of when, how or whether to sell the enterprise presents itself. It’s possibly the biggest question an entrepreneur will face.
For founders who self-funded (bootstrapped) their startup, a boardroom full of additional factors comes into play. Some are the same as for investor-funded firms, but many are unique.
After 18 years of bootstrapping a BI software firm into a business that now serves 28,000 companies and 3 million users in 75 countries, here’s what I’ve learned about myself, my company, about entrepreneurship and about when to grab for that brass ring.
Put happiness at the center of the decision, and let your intuition — the instincts that made you the person you are today — be your guide.
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Micromobility startup Helbiz to go public via a SPAC, and will expand into ghost kitchens
Micromobility startup Helbiz, which now operates across Europe and the USA, is merging with a special purpose acquisition company (SPAC) to become a publicly listed company, giving it a war chest to potentially roll-up smaller competitors in the space, as well as the resources to expand into “cloud” or “ghost” kitchens as part of a move into food delivery.
Helbiz intends to merge with GreenVision Acquisition Corp. (Nasdaq: GRNV) in the second quarter of 2021. The combined entity will be named Helbiz Inc. and will be listed on the Nasdaq Capital Market under the new ticker symbol, “HLBZ.”
The transaction includes $30 million PIPE anchored by institutional investors and approximately $80 million in net proceeds will be fed into Helbiz’s micromobility and advertising businesses, which have 2.7 million users.
Helbiz says the merged entity will have a valuation of $408 million, and by run Helbiz’s existing management under CEO Salvatore Palella.
Palella said: “Through this transaction, we’re committed to fulfilling our vision in revolutionizing transport by using micromobility to become a seamless last-mile solution.”
He further revealed to me that the company plans to establish “ghost kitchens” in Milan and Washington, DC later this year, with the aim of introducing a five-minute delivery time.
Helbiz has tried to differentiate itself from other players like Lime and Bird by offering e-scooters, e-bicycles and e-mopeds all on one platform.
Key to Helbiz’s offering is an integrated geofencing platform that tends to appeal to city authorities who don’t want scooters left in random places, as well as a swappable battery that enables easier charging of the devices. Its subscription service allows users to take unlimited 30-minute trips on its e-bikes and e-scooters every month.
In Europe the company currently operates a fleet of e-scooters and e-bicycles in Milan, Turin, Verona, Rome, Madrid and Belgrade, and in the U.S. it operates in Washington, DC, Alexandria, Arlington and Miami.
David Fu, chairman, and CEO of GreenVision, commented: “Helbiz has distinguished itself as the only company to offer e-scooters, e-bicycles, and e-mopeds all on one user-friendly platform… Helbiz has a proven and capital-light business model that combines hardware, software, and services with extensive customer relationships.”
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5 key innovations taking e-scooters to a half-billion rides in 2021
Four years ago, shared e-scooters didn’t exist. Today, they’re on track to surpass half a billion rides globally by 2021, far outpacing early growth in the carbon-heavy ride-hailing industry founded by Uber in 2009.
That’s a dramatic shift in urban transportation by any measure, and it prompts a simple but important question: How did we get here?
Understanding the key developments that helped advance micromobility over the past several years can give us valuable insights not only into where the industry is headed, but about how we can successfully shape it to meet the needs of hundreds of millions of current and future riders around the world.
From vehicle design and data to safety reporting and infrastructure, these five innovative moments have helped fuel the global growth of shared e-scooters and are helping lead cities into a healthier, more sustainable future.
#1: Shared scooters launched (fall 2017)
The very first fleet of Bird e-scooters was launched in Santa Monica, California in September of 2017. Up until this point, the micromobility industry consisted almost entirely of docked and dockless bike sharing systems that were averaging approximately 35 million trips across the United States every year — more than half of them in New York City alone.
After an encouraging start, shared e-scooter riders in the U.S. took nearly 39 million trips in 2018 and another 86 million the following year. A similar trajectory is being seen across the Atlantic, as nations such as Italy, England and the Ukraine join a rapidly expanding list of countries including Germany, France, Israel, Spain, Portugal, Belgium, Denmark, Poland and others who have chosen to supplement their urban transportation networks with modern micromobility alternatives.
Shared scooters can now be found in over 200 cities on almost every continent around the world.
#2: First custom-designed shared scooters released (fall 2018)
The first e-scooter programs taught us two things very quickly: There’s high demand for this type of micromobility offering, and custom-designed vehicles are necessary to successfully meet that demand.
The fact is, shared scooters are ridden more frequently, handle more diverse road surfaces and endure more varied weather conditions than privately owned ones. That’s why Bird’s vehicle team unveiled the industry’s first custom-designed e-scooter, the Bird Zero, in October of 2018. Equipped with more battery life, better lighting, enhanced durability and more advanced GPS technology, this was the first in a series of comprehensive vehicle evolutions intended to increase safety, sustainability and lifespan — and it worked. Tens of thousands of these scooters are still in use today, and every month of continued service reduces their already low per-mile lifetime carbon emissions even further.
Subsequent custom vehicle designs, including the Bird One and Bird Two, have added onto this foundation, introducing industry-first features such as:
- On-board diagnostic sensors capable of detecting over 200 faults.
- Vehicle intelligence systems capable of running and reporting millions of autonomous fault checks per day.
- IP67 or IP68 waterproofing on batteries.
- 14,000 mile (22,500 km) battery life, resulting in more than 10 years of average everyday use.
- Mechanical design independently tested to withstand more than 60,000 curbside impacts.
#3: Comprehensive industry safety report released (spring 2019)
Safety has rightly been the most important focus, and the most discussed aspect, of shared micromobility since its inception. It’s why Bird launched the industry’s earliest and most comprehensive free helmets for all riders campaign in January of 2018, along with a host of other safety initiatives.
In April of 2019, these programs culminated in a comprehensive e-scooter safety report. This was the first in-depth look at modern micromobility systems, using accident reports and other data to demonstrate that shared scooters have risks and vulnerabilities similar to bicycles. The report laid the groundwork for cooperative safety measures to be taken by both operators and cities to ensure that not only riders and pedestrians but all road users are protected.
Over the past year and a half, we’ve used the findings contained within the report, along with others that have since echoed its findings, to imagine and develop a series of product innovations that are helping set the standard for e-scooter safety across the industry. These include:
- Shared micromobility’s first Helmet Selfie feature to promote helmet use.
- Shared micromobility’s first Warm Up Mode feature to assist new riders.
- The first and most accurate geofencing for e-scooters to create reduced-speed and no-riding zones.
- Responsible data-sharing standards and practices to help cities build new infrastructure for bikes and scooters.
#4: Open Mobility Foundation created (summer 2019)
The last bullet above is particularly important. Cities have a crucial role to play in limiting the number of cars on the road and maximizing the amount of infrastructure available for bikes and scooters. It’s a proven strategy to improve the safety of all road users that depends heavily on one critical input: reliable, standardized data.
Since our first launch, Bird has been a strong proponent of responsible data sharing with cities. What was lacking, however, was a unified body to help guide and develop mobility data standards across the micromobility industry.
All of that changed in June of 2019, when cities like Los Angeles, New York and San Francisco came together with companies like Bird and Microsoft and a consortium of nonprofit organizations called OASIS to form the Open Mobility Foundation (OMF). As chairperson and general manager of the LADOT Seleta Reynolds wrote in Forbes, the OMF platform “helps us achieve important city goals like increasing safety, equity, and health outcomes, while lowering emissions, and reducing congestion.”
These collaborative efforts to manage micromobility systems using open-source code and shared data standards might seem wonky, but they’ve had some very tangible real-world effects. In Atlanta, shared e-scooter data has been used to quadruple the city’s protected bike lanes by 2021. Santa Monica recently used scooter data to draft and pass an amendment that will add 19 new miles of separated micromobility infrastructure.
#5: UK, NY e-scooter programs approved (spring 2020)
This year’s decisions by the UK and the state of New York to legalize shared e-scooters and launch respective pilot programs may not be an innovation, but it’s a crucial development that will ensure the industry tops 500 million rides in 2021.
From an environmental and urban mobility perspective, London and New York are two of the most important cities in the world. Combined, they’re home to 17 million people and more than 10 million daily car trips. The introduction of e-scooters into these two densely packed and highly mobile cities will have a dramatic impact on daily commuter habits, particularly at a time when public transit ridership is still suffering due to COVID-19. That’s good news for cities, citizens and the environment.
The data that will be gained from such a high volume of micromobility rides won’t just help inform infrastructure improvements in New York and London. It will be added to a growing body of research that’s rapidly influencing micromobility technology and accelerating its adoption around the world.
Looking forward
So what can we learn from all of this? What will the first four years and 500 million rides of the shared e-scooter industry tell us about the future of micromobility?
First, we should expect its growth to continue. Adaptable, environmentally friendly solutions to car congestion and urban pollution were in high demand even before the global spread of the coronavirus in 2020. Now they’re proving themselves to be a necessity. Look for the relationships between cities and operators to strengthen and become more cooperative as scooters transition from a perceived recreational vehicle to an essential part of the urban transportation grid. This will include dramatic, data-informed improvements in protected infrastructure for both cyclists and scooter riders.
Second, we should anticipate that e-scooter technology will continue to develop around two key pillars: safety and sustainability. This applies as much to the form and functionality of the vehicles themselves as it does to the daily operations that manage them. Longer lifespan, improved battery performance, increased durability and enhanced diagnostics will be the benchmarks by which we measure this progress.
Finally, we should anticipate that, as the data from hundreds of millions of annual rides continues to accumulate, our understanding of urban mobility needs will become much clearer and more nuanced. Urban planning decisions will be able to be made based on street and hour-specific needs, identifying potentially dangerous areas and taking low-cost, high-impact actions to remedy them.
If current trends continue, and there’s every reason to believe that they will, the time it takes to add another half-billion e-scooter rides to the global total will very soon shrink from four years to less than one.
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E-scooter firms get the green light to start trials of up to one year on UK streets
In light of COVID-19 and social distancing regulations, the U.K. has been working on making it easier for people to get from point A to B in cities without resorting to buses and trains or bringing more cars to congested roads, and today that strategy took an interesting leap forward.
The country’s Department for Transport today announced that it would start allowing e-scooters, by way of e-scooter rental companies, to legally operate across the country initially in a trial phase starting no later than August. Councils and other authorities, including across London and other major cities, are working on putting together trials that could run for as long as 12 months under guidelines provided by the government.
The regulations come into force on July 4, the DfT said, with the first trials expected to begin a week later.
“As we emerge from lockdown, we have a unique opportunity in transport to build back in a greener, more sustainable way that could lead to cleaner air and healthier communities across Great Britain,” said Transport Minister Rachel Maclean in a statement. “E-scooters may offer the potential for convenient, clean and cost-effective travel that may also help ease the burden on the transport network, provide another green alternative to get around and allow for social distancing. The trials will allow us to test whether they do these things.”
There are some restrictions in place: E-scooters will not be able to go faster than 15.5 miles per hour, and they will only be able to use roads and cycle lanes, not sidewalks or other areas reserved for pedestrians. Users will need a drivers license (full or provisional). The scooters themselves will not need to be registered as vehicles but will need insurance. As with bicycles, users will be recommended — but not required — to wear helmets.
It seems that privately owned e-scooters will not be included in the rule relaxation, but it’s not clear what steps regulators will take — if any — to avoid the cluttering that we have seen in some cities overrun with too many dockless scooters crowding sidewalks.
The list of e-scooter hopefuls is long. From the word go, those that are looking to operate in the U.K. include Bird, Bolt (the ridesharing startup out of Estonia), Tier, Neuron Mobility, Lime, Voi and Zipp Mobility.
We’re contacting the DfT with our questions and will update this post as we learn more.
Electric scooters will now join the ranks of other shared transportation options that include bikes and e-bikes, as a complement to mass transit and of course walking or using your own nonautomotive wheels as an alternative to using cars. E-scooters have been seen both as an alternative for short distances (between 1 and 5 miles) but also as a last-mile solution in combination with other transport modes aimed at longer distances, like buses and trains.
The news today lifts restrictions that had previously been in place that classified e-scooters as motor vehicles and therefore required the e-scooters to be licensed and taxed, and for operators to have licenses to use them.
Those rules also meant that the e-scooters were illegal to use on sidewalks, with the only exception to all that being legal usage across select (and very limited) campuses on private land.
The moves come on the heels of a consultation in March to pilot e-scooter use in three regions of the U.K., along with a number of other initiatives including e-cargo carriers and using drones to transport medical supplies — the aim being to explore in quick order a number of new technologies to expand transportation options available to consumers, as well as essential businesses and the people who work in them.
The bigger trend has seen other cities also looking to relax rules to improve transportation options to people who wish to socially distance but still need to get around urban areas in ways that are quicker than walking. New York City is also expected to unveil its own roadmap for e-scooter pilots in the near future.
The news made official today had been something of a badly kept secret, specifically among transportation startups whose businesses have been in a holding pattern waiting for the regulator to ease up on restrictions that had been in place.
Just about all of those startups have been sending out alerts to journalists for over a week now with comments on the government’s widely expected announcements.
“We welcome the DfT’s announcement and are excited to be one step closer to the starting of e-scooter trials,” said Zachary Wang, CEO of Neuron Mobility, in a statement. “We are already in discussions with quite a few councils, as no two towns or cities are the same we look forward to partnering with them to safely introduce e-scooters in a way that best suits their individual needs. COVID-19 has led to a fundamental rethink of the way we travel and e-scooters have the potential to radically improve how we get around our towns and cities. We are delighted that people in the U.K. will soon be able to benefit from shared e-scooters. They will allow people to continue social distancing while also providing a more efficient travel option than gas-guzzling alternatives.”
Some have been waiting for a chance to operate for some time.
“We welcome today’s announcement from the government as it looks to get cities moving again safely and in an environmentally friendly way,” said Roger Hassan, COO of TIER Mobility, in a statement. “We already have more than 1,000 of our industry leading scooters in our U.K. warehouse, ready to be deployed and we will be shipping more over very soon. Everyone at TIER is looking forward to working with the government and with local authorities to make e-scooters in the U.K. a huge success story.”
While there had been restrictions in place before now, I should point out that they were often badly enforced: In London there have always been some private e-scooter owners zooming around alongside bikes and cars on the roads, and I’ve even stopped at red lights on my bike, with an e-scooter on one side of me and a police officer on the other, and not a word gets exchanged, just a simple shrug of “What can you do?” So decriminalising, as it has done in other industries, will hopefully mean better oversight, alongside better choice for users.
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Uber doubles down on micromobility
Hello and welcome back to our regular morning look at private companies, public markets and the grey space in between.
Today we’re looking into Uber’s bike bet and what the push could mean for Lime and other micromobility companies working to find a sustainable business model. As profitability comes back into vogue among investors at the expense of growth, both Uber and a cadre of mobility-focused startups are hoping that electric- and pedal-powered transport pay off.
Let’s take a look.
Uber’s bike push
Uber is most famous for its ride-hailing business, and the on-demand car-hire service that Uber was founded upon still generates the bulk of its revenue. In its most recent quarter, for example, Uber’s ride-hailing segment generated $2.86 billion in adjusted net revenue. The next-largest Uber business, its Uber Eats segment, generated a comparatively modest $392 million in adjusted net revenue.
Which brings us to the smaller Uber efforts. Freight, its aptly-named hauling business, brought in $218 million in adjusted net revenue in the same quarter (Q3 2019). And finally, Uber’s “Other Bets” segment was responsible for $38 million in adjusted net revenue. That was the smallest result, but also the fastest-growing, exploding from $3 million in adjusted net revenue in the year-ago quarter.
While Q3 2019 was better for Uber than its preceding periods regarding growth, the company’s slowing expansion and stiff losses (its net loss in the period came to $1.16 billion), have left the global transportation giant hunting for new revenue. And its Other Bets segment, which includes incomes from “dockless e-bikes and e-scooters,” is growing like heck.
This recent news item was therefore not surprising:
“We want to double down on micromobility,” Christian Freese, Jump’s head of EMEA, told CNBC in an interview. “We have seen how beautifully it works with our core business and ride sharing, and want to invest more and deeper, especially in Europe.”
Uber claims adoption of Jump’s bikes and scooters in Europe has outpaced that of the U.S. in the last eight months. It says more than 500,000 Europeans rode the vehicles in the last eight months alone, racking up 5 million trips in total.
The move by Uber makes good sense. The firm needs to grow, it has found a vein of consumer interest to mine, and it has the scale (financial, and in terms of an existing userbase) to pull off the scheme.
Of course, even if Uber quadrupled its Other Bets income (which includes more than just micromobility dollars), the segment would only add up to around 4% of its Rides adjusted net revenue (using the company’s Q3 figure for reference.) Growth, however, is growth, and investors love a story.
Uber is not the only company that wants to make bikes and scooters work at scale. There are a number of startups around the world that have raised rafts of capital to do just that. And they don’t want Uber to win.
Lime’s new thing
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Pan-European VC fund Target Global is opening an office in Barcelona
Hola Barcelona. Target Global, a pan-European VC firm with €700 million under management and a broad investment canvas spanning SaaS, marketplaces, fintech, insurtech and mobility, is opening an office in the Catalan capital.
Investor director, Lina Chong, will lead the expansion into Spain, having relocated to Barcelona from the fund’s Berlin headquarters. They’re setting up in a co-working space on Avenue Diagonal in the center of the city.
Target Global backs early and growth stages startups, as well as doing some seed investing. The firms tells us it’s expecting to do between one and three deals per year out of the Barcelona office, envisaging the same mix of investments in terms of early and growth stage.
“We’ve been seeing decent deals in both stages. Definitely. Across Spain,” says Chong. “There is just more — by numbers — way more early stage seed than A. I think that’s just the maturity of the ecosystem here.”
Dialling up a local presence across Europe means Target Global can pitch founders on being able to connect talent and expertise across key regional startup hubs, while also plugging into a wider international network. (It also has offices in London, Tel Aviv and Moscow.)
From a VC perspective opening local offices is of course about deal flow. Being on the ground to take more meetings widens the pipe, increasing the chance of an early shot at the next high growth business.
That’s important because Europe’s startups have many more options for early stage funding than in years past, and founders are getting smarter about choosing their investors. Boots on the ground means more time for all important relationship building.
Target Global describes itself as something of a startup — it was founded in 2012 — which means it’s competing for deals with VCs that have more established brands and networks. Becoming a familiar face in the room looks like a solid strategy to growth hack its own network.
“We are a global or a pan-European fund but for an entrepreneur here we want them to feel that we’re local; we understand the ecosystem; that we have deep rooted connections; that we’re committed; that we show up,” general partner Shmuel Chafets tells TechCrunch.
“It’s all a function of time and effort. Just being here and having breakfast with people, lunch with people and helping out even the people we don’t invest. You get more connected and then you start to see more deal flow.”
This is the second local office it’s opened in Europe this year, after adding a London base in April — making it a flattering pick for Barcelona. Plenty of other European hubs are being passed over in the city’s favor this time, be it Madrid, Lisbon, Paris or Stockholm.
Chafets says the firm looked at five or six other cities but settled on Barcelona for now, though he won’t rule out opening more offices in future. “Never say never,” he quips.
Having been a regular visitor to Barcelona for a number of years he talks enthusiastically about the creative energy motivating entrepreneurs — saying the city’s ecosystem reminds him of how Berlin felt a few years ago. “It looks like it’s just about to happen,” he reckons.
“From what I’ve seen Barcelona is sort of strong in creative. It’s a very creative city. It’s always pretty strong in mobile, historically. It had more mobile successes… SaaS, particular smb SaaS, is pretty good here. I think it would be harder to find enterprise sales companies and companies building these very deep tech stuff right now. But definitely in the marketplace, smb SaaS space, mobile space you see great stuff here.
“That ties into the creativity, because it’s a product driven environment — not a tech driven environment. I think Berlin is a very operationally driven environment, Tel Aviv is a very tech driven environment, this is a very product driven environment — which actually complements well our other hubs.”
“There’s some pent-up energy here,” agrees Chong, who says they’ve already come across a “surprising” amount of deal flow. “Again it’s very similar to Berlin where there’s a lot of willingness and there’s a lot of dreaming but there’s not a lot going on. So I think the younger people here they’re creating that.”
Target Global has been testing the water prior to formalizing its commitment to Barcelona, and has four local portfolio companies which it’s ploughed around €20M into over the past 12 months.
Its biggest regional investment to date is in business trip booking SaaS, TravelPerk. It’s also backed flatmate matching platform Badi; online doctor booking platform, Doc Planner (which relocated from Warsaw, Poland after merging with local startup Doctoralia); and medical chat app MediQuo.
From a wider perspective, Barcelona’s tech ecosystem has been gathering momentum for years, helped by the annual presence of the world’s biggest mobile tradeshow (MWC) — as well as more specific pull factors for startups such as a relatively low cost of living and an attractive Mediterranean location.
“It’s a great place to live and you can’t ignore that,” says Chafets. “In Europe if you’re a team and you’re an international team there are very few places you can live.”
This combination means Barcelona is now home to a growing number of high growth startups, including Target Global’s portfolio firm TravelPerk — as well as the likes of on-demand delivery platform Glovo; and RedPoints, which sells a SaaS to brands for detecting and acting against the sale of fake goods online, to name two other notable examples.
Other local startups grabbing attention and investment in recent years include 21Buttons, Holded, Housfy, Typeform and Verse. While hyper local mobile marketplace startup Wallapop — which was on a growth tear in an earlier wave of ecoystem growth — remains the go-to classified app on every local’s phone (though it merged with a US rival back in 2015).
The city even has its own youthful scooter startup (Reby) which has refused to be put off by some tough regulations controlling rentals — and has recently been applying AI to try to make like a good citizen by automatically detect poor parking.
Mobility is a major area of focus for Target Global — which last year announced a dedicated fund (with an initial raise of $100M) for startups working to disrupt transportation. Although, when it comes to stand-up e-scooters the firm is already invested in Berlin-based Circ so will presumably be looking to spend elsewhere on that front.
“Barcelona is the perfect city for scooters,” says Chafets. “Scooters can really change the way the city works. It’s also small and has relatively good public transportation from outwards in — but they need to be regulated. You need to really make sure that [they aren’t a misused nuisance].”
He notes that European regulators have been relatively quick to spot the risks of shared mobility, and close off the antisocial expansionist playbook that played out in some US cities during the first wave of scooter startups — when people trolled Bird by hanging scooters in trees (or, well, worse) — but he sees that as good news for building a sustainable future for alternative mobility.
“It’s a great challenge and it will be a huge money maker — that’s where we want to be right, multiple trillion dollar businesses!”
Away from disruptive developments on the ground in Barcelona and the other local tech hubs that Target Global is intending to explore from its new base in Catalonia, it also views Spain as a low risk gateway to opportunities on the other side of the Atlantic.
“There’s a decent local domestic market and there is a natural second market in South America,” says Chafets. “Actually in the US too — because Spanish is the second most commonly spoken language in America so when you start a company here you have that second market built in. Which is very important — you can scale it.”
“Latin America is a fascinating market right now, it’s a fascinating time,” he adds. “So in a way it’s a way for us to make a side bet on Latin America without going out of Europe and investing far.”
We’ll share a full interview with Chafets and Chong on Extra Crunch.
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Movo grabs $22.5M to get more cities in LatAm scooting
Madrid-based micromobility startup Movo has closed a €20 million (~$22.5M) Series A funding round to accelerate international expansion.
The 2017-founded Spanish startup targets cities in its home market and in markets across LatAm, offering last-mile mobility via rentable electric scooters (e-mopeds and e-scooters) plotted on an app map. It’s a subsidiary of local ride-hailing firm Cabify, which provided the seed funding for the startup.
Movo’s Series A round is led by two new investors: Insurance firm Mutua Madrileña, doubtless spying strategic investment potential in helping diversify its business by growing the market for humans to scoot around cities on two wheels — and VC fund Seaya Ventures, an early investor in Cabify.
Both Mutua Madrileña and Seaya Ventures are now taking a seat on Movo’s board.
Commenting on the Series A in a statement, Javier Mira, general director of Mutua Madrileña, said: “The equity investment in Movo reflects Mutua Madrileña’s aspiration to respond to the new mobility needs that are emerging, and to the economic and social changes that are occurring and that are transforming our life habits.”
Movo currently operates in six cities across five countries — Spain, México, Colombia, Perú and Chile.
It first launched an e-moped service in Madrid a year ago, according to a spokeswoman, and has since expanded domestic operations to the southern Spanish coastal city of Malaga, as well as riding into Latin America.
The new funding is mostly pegged for further international expansion, with a plan to expand into new markets in LatAm, including Argentina, Brazil and Uruguay. Movo is targeting operating in a total of 10 countries by the end of 2019.
The Series A will also be used to grow its vehicle fleet in existing markets, it said.
“We are very excited to be able to offer a solution to the problems of mobility in cities, particularly for short distances in areas with high population density,” said CEO Pedro Rivas in a statement. “We are committed to working together with governments to complement mass public transport with these new micromobility alternatives, so that people can get around in a more sustainable and efficient way.”
Commenting on its investment in the Cabify subsidiary, Seaya Ventures’ Beatriz Gonzalez, founder and managing partner, said the fund is “committed to the evolution of mobility towards sustainable alternatives in the world’s major cities.”
“We want to be part of the transport revolution by promoting projects like Cabify and, of course, Movo,” she said in a statement, which seeks to paint micromobility as a solution for urban congestion and poor air quality. “We are motivated to continue to promote companies with which we share this sense of responsibility towards the development and improvement of people’s quality of life.”
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Investigation finds e-scooters a cause of 1,500+ accidents
An investigation by Consumer Reports may force electric scooter businesses to double back on safety measures.
The magazine found electric scooters caused 1,545 injuries in the U.S. since late 2017, according to data collected from 110 hospitals and five public agencies in 47 cities where Bird or Lime, the leading tech-enabled scooter-sharing platforms, operate.
The news comes shortly after UCLA published a study finding that 249 people required medical care following scooter accidents, with one-third of that group arriving at the hospital in an ambulance.
“These injuries can be severe,” Tarak Trivedi, an emergency physician at UCLA and the study’s lead author, told CNET. “These aren’t just minor cuts and scrapes. These are legit fractures.”
Despite commentary from scooter CEOs suggesting otherwise, safety doesn’t seem to be a priority for businesses in the space. Given the nature of the industry, taking a ride on an e-scooter or a dockless bike without a helmet is the norm. That, coupled with failed hardware, irresponsible riding practices and access to scooters in the evening, has unsurprisingly led to several accidents and even casualties. Just this past weekend, the city of Austin reported a pedestrian riding a Lime scooter died after being struck by an Uber driver. The Lime scooter rider was traveling the wrong way down an interstate.
Lime, Bird and other leading scooter providers do provide free helmets to riders and don’t encourage poor scooter etiquette, but ensuring riders actually carry helmets or don’t do stupid things like travel the wrong way down a busy road is impossible.
With a fresh $310 million in Series D funding for Lime, announced today, it will be interesting to see how the company ramps up safety efforts.
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A tale of two scooter cities
The kids in Madrid’s El Retiro Park are loving their new on-demand joyriding toys. Lime launched its scooters in the Spanish capital this summer.
Spending a weekend in the city center last month the craze was impossible to miss. Scooters parked in clusters vying for pay-to-play time. Sometimes lined up tidily. All too often not.
The bright Lime rides really stood out, though it’s not the only brand in town. Scooter startups have been quick to hop on the international expansion bandwagon as they gun for growth.
Grandly proportioned El Retiro clearly makes a great spot for taking a scooter for a spin. Test rides beget joyrides, and so the kids were hopping on. Sometimes two to one.
The boulevard linking the Prado with the Reina Sofia was another popular route to scoot.
While a busy central bar district was a hot ride-ditching spot later on. Lines of scooters were vying for space with the vintage street bollards.
The appeal was obvious: Bowl up to the bar and drink! No worries about parking or how to get your ride home afterwards. But for Saturday night revellers there was suddenly a new piece of street furniture to lurch around, with slouching handlebars sticking up all over the place. Anyone trying to navigate the pavement in a wheelchair wouldn’t have had much fun.
In another of Spain’s big tourist cities the scooter story is a little different: Catalan capital Barcelona hasn’t had an invasion of on-demand scooter startups yet but scooters have crept in. In recent years locals have tapped in of their own accord — buying not renting.
Rides are a front-of-store sight in electronics shops, big and small — costing a few hundred euros. Even for a flashy Italian design…
Electronic scooters
Take a short walk in one of the more hipster barrios and chances are you’ll pass someone who’s bought into the craze for nipping around on two wheels. There’s lots of non-electric scooters too but e-scooters do seem to have carved out a growing niche for themselves with a certain type of Barcelona native.
Again, you can see the logic: Well-dressed professionals can zip around narrow streets that aren’t always great for finding a place to (safely) lock up a bike.
There’s actually a pretty wide variety of wheeled e-rides in play for locals with the guts to get on them. Some with seats and/or handles, others with almost nothing. (The hands-in-pockets hipsters on self-balancing unicycles are quite the sight.)
In both of these Spanish cities it’s clear people are falling for — and, well, sometimes off — the micro-mobility trend.
But the difference between the on-demand scooters being toyed with in Madrid vs Barcelona’s locally owned two wheelers is a level of purpose and intent.
The Lime rides in Madrid’s center seemed mostly a tourist novelty. At least for now, having only had a couple of months to bed in.
Whereas the organic growth of scooters in Barcelona barrios is about people who live there feeling a need.
Even the unicycling hipsters seem to be actually on their way somewhere.
Hop on
What does this mean for scooter startups? It’s another example of how technology’s utility and wider societal impacts can vary when you parachute a new thing into a market and hope people jump on board vs growth being organic and more gradual because it’s led by real-world demand.
And it’s essential to think about impacts where scooters and micro-mobility is concerned because all this stuff must piggyback on shared public spaces. No one has the luxury of being able to avoid what’s buzzing up and down their street.
That’s why lots of on-demand scooters have ended up trashed and vandalized — as residents make their feelings known (having not been asked about the alien invaders in the first place).
In Europe there’s a further twist because the spaces scooter startups are seeking to colonize are already well served with all sorts of public transport options. So there’s a clear and present danger that these new kids on the block won’t displace anything. And will just mean more traffic and extra congestion — as happened with ride-hailing.
In Madrid, the first tranche of on-demand scooters seems to be generating pretty superficial and additive use. Offering a novel alternative to walking between sights or bars on a trip to-do list. Just possibly they’re replacing a short taxi or metro hop.
In the park, they were being used 100% for fun. Perhaps takings are down at the boating lake.
Barcelona has plenty of electro-powered joyriding down at the beach front in summer — where shops rent all sorts of wheels to tourists by the hour. But away from the beach locals don’t seem to be wasting scooter charge riding in circles.
They’re stepping out for regular trips like commuting to and from work. In other words, scooters are useful.
Given all this activity and engagement micro-mobility does seem to offer genuine transformative potential in dense urban environments. At least where the climate doesn’t punish for most of the year.
This is why investors are so hot on scooters. But the additive nature of micro-mobility underlines a pressing need for the technology to be properly steered if cities, residents and societies are to get the best benefits.
Scooters could certainly replace some moped trips. Even some local car journeys. So they could play an important role in reducing pollution and noise by taking trips away from petrol- and diesel-powered vehicles.
Because they offer a convenient, low-barrier-to-entry alternative with populist pull.
Not being too high speed also means, in and of themselves, they’re fairly safe.
If you’re just barrio hopping or can map most of your social life across a few city blocks there’s no doubting their convenience. Novelty is not the only lure.
Hop off
Though, equally, the local-level journeys that scooters are best suited for could just as easily be completed on foot, by bike or via public transit options like a metro.
And Barcelona’s congested streets don’t look any less packed with petrol engines — yet.
Which means scooters are both an opportunity and a risk.
If policymakers get the regulations right, a smart city could leverage their fun factor to nudge commuters away from more powerful but less environmentally friendly vehicles — with, potentially, some very major gains up for grabs.
Subsidized scooters coupled with a framework of congestion zones that levy fees on petrol/diesel engines is one simple example.
A clever policy could open the possibility of excluding cars almost entirely from city centers — so that streets could be reclaimed for new leisure and retail opportunities that don’t demand masses of parking space on tap.
Pollution is a chronic problem in almost all large cities in the world. So reshaping city centers to be more people-centric and less toxic to human health by displacing cars would be an incredible win for micro-mobility.
Even as the hop on, hop off ease of scooters offers a suggestive glimpse of what’s possible if we dare to rethink urban architecture to put people rather than four-wheeled vehicles first.
Yet get the policy wrong and scooters could end up — at very best — a frivolous irrelevance. A joyride that disrupts going nowhere. Yet another nuisance on already choked streets. An optional extra that feels disposable and gets rudely discarded because no one feels invested.
In this scenario the technology is not socially transformative. It’s more likely an antisocial nuisance. And a pointless drain on resources because it’s doing no more than disrupting walking.
Scooter startups have already run into some of these issues. And that’s not surprising given how fast they’ve been trying to grow. Their early expansionist playbook does also risk looking like Uber all over again.
Yet Uber could have pioneered micro-mobility itself. But being ‘laser focused on growth’ seemingly gave the company tunnel vision. Only now, under a new CEO, it’s all change. Now Uber wants to be a one-stop platform for all sorts of transport options.
But how many years did it waste missing the disruptive potential of micro-mobility coming down the road because it was too busy trying to fit more cars into cities — and ignoring how residents felt about that?
An obsession with growth at all costs may well be a side effect of major VC dollars flooding in. But for startups it really does pay to stay self-aware, perhaps especially when you’re rolling in money. Else you might find your investors funding your biggest blind spot — if you end up missing the next even more transformative disruption.
The really clever trick to pull off is not ‘scale fast or die trying’; it’s smart growth that’s predicated upon applying innovative technologies in ways that bring whole communities along with them. That’s true transformation.
For scooters that means not just dumping them on cities without any thought beyond creaming a profit off of anything that moves. But getting residents and communities engaged with the direction of travel. Partnering with people and policymakers on the right incentives to steer innovation onto its best track.
Move people around cities, yes, and shift them out of their cars.
There’s little doubt that Uber’s old ‘growth at any cost’ playbook was hugely wasteful and damaging (not least to the company’s own reputation). And now it’s having to retrofit a more inclusive approach at the same time as unpicking an ‘environmentally insensitive’ legacy that original playbook really doesn’t look so smart.
Scooter startups are still young and have made some of their own mistakes trying to chase early scale. But there are reasons to be cheerful about this new crop of mobility startups too.
Signs they see value and opportunities in being pro-actively engaged with the environments they’re operating in. Having also learnt some hard early lessons about the need to be very sensitive to shared spaces.
Bird announced a program this summer offering discounted rides to people on low incomes, for example. Lime has a similar program.
These are small but interesting steps. Here’s hoping we’re going to see a lot more.
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